Weight painting for everything?
To sum it up:

Creating a vertex group is just saying that this group of vertex will have this name, it can be useful for several purposes, some groups will be useful to parent the vertices to an armature, others for particles, etc... 

You can create as many vertex groups as you want, and each vertex group is independent from the others. For example some vertices can be part of several vertex groups.

To create a vertex group click on the « + » button on the right of the Vertex Groups list, give it a name and select this group. If you haven’t any vertex group yet and you begin to paint in Weight Paint mode, it will automatically create a vertex group.

To choose the vertices that will be part of this Vertex Group you can either do it with Weight Paint mode with the brush, or in Edit mode with the Assign button below the Vertex Groups list.

A vertice can be only 50% (or 70% or 10% or whatever %) part of a group, it means for example that when you assign an effect to this group, this part of the group will only produce 50% of this effect.

When you paint in Weight Paint mode, only the part that is red, yellow or green (i.e. not blue) is assigned to the vertex group that is selected in the Vertex Groups list. The more the zone is red, the more it is 100% part of the vertex group. The blue zone is not part of this selected group, but it can be part of another vertex group: select the other vertex groups of your Vertex Groups list to check it out.

If you want to create or modify a vertex group in Edit mode, select a group of vertices and click Assign under the Vertex Groups list. The Weight factor will determine how much weight you want to give to some vertices, if you want them to be 100% part of this group (equivalent to red), or only 50%, etc...

I hope it answers your question...